BAKER BOTTS L.L.P. 401(k) AND SAVINGS PLAN SUMMARY PLAN DESCRIPTION

Transcription

1 BAKER BOTTS L.L.P. 401(k) AND SAVINGS PLAN SUMMARY PLAN DESCRIPTION January 1, 2015

2 Summary Plan Description of Baker Botts L.L.P. 401(k) and Savings Plan * * * * * * * * * * * * * PLAN OVERVIEW The Baker Botts L.L.P. 401(k) and Savings Plan - Plan A and the Baker Botts L.L.P. 401(k) and Savings Plan - Plan B, which are identical plans except with respect to eligibility (collectively, the Plan and individually, Plan A and Plan B )), are designed to give you a convenient way to save for your retirement. The Plan also receives and holds contributions made from time to time by Baker Botts L.L.P. (the Firm or Employer ) for the benefit of specific groups of participants. The Plan is a tax-qualified retirement plan under Section 401(a) of the Internal Revenue Code (the Code ) that provides certain tax advantages to you and, in the event of your death, to your beneficiaries. You should discuss these tax advantages with your personal tax and/or financial advisor. Generally, the Plan allows you to: Contribute to the Plan with pre-tax dollars, reducing the amount of your current federal income taxes; Share in an employer savings contribution on an annual basis - for any year the Firm elects to make a contribution, provided you meet certain eligibility requirements; Make after-tax Roth 401(k) contributions to the Plan; Make rollover contributions to the Plan; Invest your contributions and the Firm s contributions to the Plan in multiple investment funds; Receive tax-deferred investment earnings on both your and Firm contributions; Take loans from your contributions to the Plan and repay yourself with interest; Take certain withdrawals from your Account while employed at the Firm and take your Account balance with you when you leave the Firm; and Access your Account at Voya Financial ( Voya ), the Plan s recordkeeper, online at the Plan s website or by calling the Voya Service Center at k ( ) (after you have been issued a PIN by Voya). When you call Voya, you may choose to speak with a Participant Services Representative between 8:00 a.m. and 8:00 p.m. ET, Monday through Active

3 Friday (unless the market is closed on that day). In addition, you may your questions at any time to Voya through the Plan s website by accessing Services under the Plan Information/Participant Services tabs. A Participant Services Representative will respond to your question within three (3) business days. This summary plan description ( SPD ) describes, in non-technical language, the major provisions of the Plan as in effect on January 1, For example, it explains how you become a Participant in the Plan, how much you can contribute to the Plan, how much the Firm may contribute to the Plan, and how your benefits are determined and paid to you. Capitalized terms used, but not defined, in this SPD are defined in the Plan. It is important for you to understand that this SPD is only a summary and thus it cannot - and does not - cover all the details of the Plan or how the Plan s rules will apply to every person in every situation. This SPD is available electronically on SquareOne (go to SPD/Certificate of Coverage located under Human Resources under Support Services on the SquareOne home page). You may also request a paper copy of this SPD from the Benefits Office in the Firm s Houston office. All of the specific rules governing the Plan are contained in the official Plan documents, which include the Plan document and related trust agreement. Upon written request, you may obtain copies of the official plan documents from the Plan Administrator; you may be charged for the copying costs. The descriptions in this SPD are based on official Plan documents. If there is a disagreement between this SPD and the Plan documents, the Plan documents always govern. ELIGIBILITY AND PARTICIPATION An individual (i) who is employed by the Firm ( Employee ) or is a partner of the Firm ( Partner ) and (ii) who meets the eligibility requirements described below is immediately eligible to participate in the Plan (with such individual referred to as a Participant ). To be an eligible Employee, you must be either a U.S. citizen or a U.S. resident who is paid on the Firm s U.S. payroll. To be an eligible Partner, you must be either a U.S. citizen or a U.S. resident and paid in U.S. dollars. Employees who (a) are Leased Employees, (b) are designated, compensated or otherwise classified or treated as independent contractors by the Employer or any Affiliate, (c) are non-u.s. citizens employed by the Employer outside of the United States, (d) have Social Security numbers that end with an even number (for Plan A) or that end with an odd number for (Plan B), or (e) are classified by the Firm as Summer Associates or Senior Counsel are not eligible to participate in this Plan. As an eligible Employee or Partner, you will receive information about the Plan from the Firm on your hire date. To enroll in the Plan by phone, call Voya at k ( ) and follow the prompts. If you prefer to enroll online, go to the Plan s website at and login with your social security number and the password that you will receive in the mail from Voya soon after your hire date. Active

4 CONTRIBUTIONS Type of Contributions Both you and the Firm may make contributions to the Plan. Eligible Employees make contributions to the Plan on a payroll basis, while eligible Partners make contributions to the Plan on an annual basis. You may make 401(k) Contributions, Roth 401(k) Contributions, or a combination of 401(k) and Roth 401(k) Contributions to the Plan (as each type of contribution is defined below). The Firm may make discretionary Savings Contributions to the Plan on behalf of eligible Employees and will make Savings Contributions to the Plan on behalf of eligible Partners. If eligible, you may also make Catch-Up Contributions to the Plan as described below. All of your contributions and the Firm s contributions to the Plan, and any related investment earnings and losses on those contributions, are held in the trust fund under the Plan, established pursuant to a trust agreement, in a Plan account for you (your Account ). If you terminate employment with the Firm or withdraw from the Firm as a Partner, you will no longer be eligible to make contributions to the Plan. If you are subsequently rehired or rejoin the Firm as a Partner and meet the eligibility requirements described above, then you will again be eligible to participate in the Plan on the first date you recommence employment with the Firm or rejoin the Firm as a Partner. EMPLOYEE/PARTNER CONTRIBUTIONS 401(K) CONTRIBUTIONS 401(k) Contributions are amounts you elect to have deducted from your Plan Compensation (as defined below) before certain taxes are withheld and contributed to the Plan instead of being paid directly to you. 401(k) Contributions are not currently subject to federal (and, in most cases, state) income taxes but are subject to withholding for federal social security taxation ( FICA ). This means that 401(k) Contributions contributed to the Plan on your behalf save you current tax dollars by deferring taxation on the contributed amounts until distributed from the Plan. Further, the earnings on your 401(k) Contributions and any Catch-Up Contributions accumulate tax-free until distributed. If you are an Employees, you may make 401(k) Contributions by electing to defer any whole percent from 1% to 75% of your Compensation on a pay period basis from your pay check, subject to certain Code limits discussed later (see Limits on Contributions ). If you are a Partner, you may make 401(k) Contributions by electing to defer any whole percent from 1% to 75% of your Compensation to the Plan on an annual basis, subject to certain Code limits discussed later (see Limits on Contributions ) and the Plan contribution limit for Partners for the applicable Plan Year based on your age as of the end of such Plan Year. For the 2014 Plan Year, for example, a Partner s 401(k) Contributions could not exceed (i) $7,750, if he or she was under age 40; (ii) $9,750 if he or she was age 41 to 49; or (iii) $17,500, if he or she was age 50 or older (with such amount equally divided between Plan A and Plan B). Active

5 For Plan purposes, if you are an Employee, your eligible compensation ( Compensation ) is the total wages actually paid to you by the Firm for personal services rendered during the Plan Year, but prior to reductions for (i) 401(k) Contributions, (ii) amounts under Code Section 125 and (iii) pre-tax transportation under Code Section 132(f), including base salary and base wages, overtime and bonuses, and short term disability pay; but excluding reimbursement for relocation expenses, any Firm contributions to this Plan or any Firm contributions to any other pension, profit-sharing or welfare plan and imputed income. In the case of a Partner, your Compensation is your earned income (within the meaning of Code Section 401(c)(2)) from the Firm s business for the Firm s fiscal year ending with or within the applicable Plan Year. ROTH 401(K) CONTRIBUTIONS In addition to, or instead of, making 401(k) Contributions to the Plan, you may elect to make after-tax Roth 401(k) Contributions to the Plan. Roth 401(k) Contributions are amounts you elect to have deducted from your Compensation after taxes are withheld and contributed to the Plan instead of being paid directly to you. The earnings on your Roth 401(k) Contributions accumulate tax-free subject to certain limitations as described below. Roth 401(k) Contributions are the reverse of 401(k) Contributions because you pay taxes today in order to reduce your tax obligation when you retire. If you are an Employee, you may make Roth 401(k) Contributions by electing to contribute any whole percent from 1% to 75% of your Compensation on a pay period basis from your pay check; provided, however, the total of your 401(k) Contributions and Roth 401(k) Contributions cannot exceed 75% of your eligible Compensation, subject to certain Code limits discussed later (see Limits on Contributions ) and the Plan contribution limit for Partners for the applicable Plan Year based on your age as of the end of such Plan Year. For Plan Year 2014, for example, a Partner s total 401(k) Contributions and Roth 401(k) Contributions could not exceed (i) $7,750, if he or she was under age 40; (ii) $9,750 if he or she was age 41 to age 49; or (iii) $17,500, if he or she was age 50 or older (with such amounts equally divided between Plan A and Plan B). Your Roth 401(k) Contribution Account is not subject to tax when you take a distribution from your Roth 401(k) Contribution Account if it is a qualified distribution. A qualified distribution is a distribution that occurs (i) after you have completed a 5-taxable-year period, which begins with the first day of the first taxable year in which your Roth 401(k) Contribution is made and ends when five consecutive taxable years have been completed, and (ii) due to death, disability (as defined in the Internal Revenue Code) or attainment of age 59½. If a distribution from your Roth 401(k) Contribution Account is not a qualified distribution, your Roth 401(k) Contributions will not be taxed on the distribution, but the earnings will be taxed and may be subject to a 10% early distribution penalty tax. purposes. Your Roth 401(k) Contributions are held in a separate account for recordkeeping Active

6 CATCH-UP CONTRIBUTIONS Participants age 50 and older are able to make annual Catch-Up Contributions to the Plan in order that they may better prepare for retirement. A Catch-Up Contribution is an additional amount you may elect to defer to the Plan as a 401(k) Contribution and/or contribute as a Roth 401(k) Contribution. Catch-Up Contributions in the form of 401(k) Contributions are not currently subject to federal (and, in most cases, state) income taxes but are subject to withholding for FICA, while Catch-Up Contributions in the form of Roth 401(k) Contributions are subject to federal (and, in most cases, state) income taxes. This means that Catch-Up Contributions contributed to the Plan as 401(k) Contributions save you current tax dollars. Further, the earnings on the 401(k) and Roth 401(k) Catch-Up Contributions you make to the Plan as Catch-Up Contributions accumulate tax-free until distributed. FIRM CONTRIBUTIONS SAVINGS CONTRIBUTIONS The Plan provides four different types of Savings Contributions. as described below. All Savings Contributions are not subject to taxation until distributed. Plus, the earnings on Savings Contributions accumulate tax-free in the Plan until distributed. (1) Staff Savings Contributions - Staff Savings Contributions may be made by the Firm on behalf of any Employee, excluding any person who is employed as an associate attorney with the Firm (unless such associate has been designated prior to January 1, 1999 by the Firm, as a Senior Associate) or any person who is a Summer Associate or other member of the Firm s legal staff, but not excluding paralegals or paralegal clerks or other Staff timekeepers ( Staff Employee ). The Firm may contribute money to the Plan on behalf of eligible Staff Employees who are employed by the Firm on the last day of the Plan Year for which the contribution is being made ( Eligible Staff Participant ). Staff Contributions for a Plan Year, if any, will be allocated to the Staff Contribution Account of each Eligible Staff Participant and will consist of Basic Staff Contributions for all Eligible Staff Participants and Supplemental Staff Contributions for Eligible Staff Participants with six or more Years of Service as of the last day of the Plan Year. The Basic Staff Contributions, if any, will be allocated to the Staff Contribution Account of an Eligible Staff Participant in the ratio that his or her Compensation bears to the total Compensation paid to all Eligible Staff Participants, but will be limited to 5% of his or her Compensation. The Supplemental Staff Contributions, if any, will be allocated to the Staff Contribution Account of each Eligible Staff Participant with six or more Years of Service as of the last day of the Plan Year in the ratio that his or her Compensation bears to the total Compensation paid to all Eligible Staff Participants with six or more Years of Service as of the last day of the Plan Year. Supplemental Staff Contributions allocated to an Eligible Staff Participant will not exceed the percentage of Compensation set forth below. Active

7 Years of Service on Last Day of Plan Year Maximum Allocation Percentage of Eligible Staff Participant s Compensation Active Years or more 3.50% 15 Years but less than 16 Years 3.25% 14 Years but less than 15 Years 3.00% 13 Years but less than 14 Years 2.75% 12 Years but less than 13 Years 2.50% 11 Years but less than 12 Years 2.25% 10 Years but less than 11 Years 2.00% 9 Years but less than 10 Years 1.75% 8 Years but less than 9 Years 1.50% 7 Years but less than 8 Years 1.00% 6 Years but less than 7 Years 0.50% Less than 6 years 0% A Year of Service means the completion of at least one hour of service during the 12 consecutive month period commencing on an Employee s date of hire and during any Plan Year thereafter, beginning with the Plan Year immediately following the Employee s commencement of service. (2) Senior Professional Staff Contributions Senior Professional Staff Contributions may be made by the Firm on behalf of any Employee who serves in a Firm-wide management position and who has been designated by the Firm as a Senior Professional Staff Employee ( Senior Professional Staff Employee ). The Firm may contribute money to the Plan on behalf of eligible Senior Professional Staff Employees who are employed by the Firm on the last day of the Plan Year for which the contribution is being made. Under the current Plan provisions, if a contribution is made on behalf of Senior Professional Staff Employees, it will be allocated to the Senior Professional Staff Contribution Account in the ratio which each Participant s Compensation bears to the total Compensation paid to all Participants who are Senior Professional Staff Employees and who are eligible to share in the allocation. (3) Special Counsel Savings Contributions Special Counsel Savings Contributions may be made by the Firm on behalf of any Employee who is an associate attorney with the Firm and who has been designated by the Firm as a Special Counsel or Of Counsel (collectively, Special Counsel Employee ). The Firm may contribute money to the Plan on behalf of eligible Special Counsel Employees who are employed by the Firm on the last day of the Plan Year for

8 which the contribution is being made. Under the current Plan provisions, if a contribution is made on behalf of Special Counsel Employees, it will be allocated to the Special Counsel Contribution Account in the ratio which each Participant s Compensation bears to the total Compensation paid to all Participants who are Special Counsel Employees and who are eligible to share in the allocation. (4) Partner Savings Contributions Partner Savings Contributions may be made by the Firm on behalf of each eligible Partner of the Firm. Partner Savings Contributions for a Plan Year are allocated to the Partner Contribution Account of each Participant who is a Partner and who is in the service of the Firm on the last day of the Plan Year, based on his or her biological age on the last day of each Plan Year. The amount of the Partner Savings Contribution is a percentage of an amount that bears the same proportion to the total Partner Contribution as the portion of the Partner s Compensation for the portion of the Plan Year during which he or she was a Partner bears to the total Compensation for all such Participants who are Partners. At the end of each Plan Year, you will be notified of the amount of your Partner Savings Contributions that will be deducted from your Firm draw account. ROLLOVER CONTRIBUTIONS If you are an Employee or a Partner in the service of the Firm, you may make Rollover Contributions of eligible amounts in cash into the Plan. You are eligible to roll over the following amounts: (1) distributions of pre-tax amounts from a prior employer s qualified plan, including pre-tax elective deferrals and related earnings from another 401(k) plan or pension plan; (2) distributions from a 403(b) annuity plan or a 457 governmental plan; or (3) pretax amounts in an Individual Retirement Account ( IRA ). This means that you can continue to defer taxes on your money contributed or accrued under your prior employer s plan(s). Your Rollover Contributions are held in a separate Rollover Account and the amount is entirely yours and non-forfeitable at all times. Rollover Contributions may be invested among any of the Investment Funds under the Plan. You should contact Voya for further information concerning Rollover Contributions and the procedures you must follow to roll money into the Plan. Amounts from a Roth IRA may not be rolled over into the Plan. Changing Contribution Elections You may increase, decrease, or completely discontinue your 401(k) Contributions and/or Roth 401(k) Contributions at any time. If you request a change between the 1st and the 15th of the month, the change will be effective as of the last payday of that month. If you request a change between the 16th and the end of the month, the change will be effective as of the payday on the 15th of the following month. To change your 401(k) Contribution and/or Roth 401(k) Contribution election, you may call Voya at k ( ) or access your Account online at Active

9 Limits on Contributions The Code imposes limits that affect the amounts you may contribute each year as 401(k) Contributions, Roth 401(k) Contributions and Catch-Up Contributions. The annual limit for the sum of 401(k) Contributions and Roth 401(k) Contributions is $18,000 for The Catch-Up Contribution limit for 2015 is $6,000. The Code limits the amount of your annual Compensation the Plan may take into account. The annual Compensation limit is $265,000 for The annual limit includes all contributions you have made to any 401(k) plan during the year. If you are employed by more than one employer during the year and contribute to more than one 401(k) plan, it is your responsibility to monitor your total contribution amount and make changes to your elections as necessary to remain within the total limit under the Code and the Plan for the year. The Code limits the amount of total contributions and other additions which may be made to your Account each year ( annual additions ). This means that the sum of the Savings Contributions made on your behalf, your 401(k) Contribution and your Roth 401(k) Contributions cannot exceed the annual additions limit. For 2015 the annual additions limit is the lesser of $53,000 or your Compensation. The amounts of all of the limits described above are adjusted by the IRS from time to time for cost-of-living increases. There are additional Plan or legal limits on your 401(k) Contributions and Roth 401(k) Contributions and there are separate limits on any Savings Contributions. If these limits are exceeded, certain highly compensated Employees or Partners may be required to reduce their contributions or receive a refund of their contributions. Anyone affected by these contribution limits will be notified by the Plan Administrator. Finally, as noted previously, the Plan limits the total amount of 401(k) Contributions and/or Roth 401(k) Contributions you may contribute to the Plan each payroll period and limits the total annual contribution you may make as 401(k) Contributions and/or Roth 401(k) Contributions to the Plan to a maximum of 75% of your Compensation. The Plan Administrator may impose additional limits under the Plan that will restrict the amount that Participants may contribute to the Plan each year. MAINTENANCE AND INVESTMENT OF YOUR ACCOUNT All of your contributions and the Firm s contributions to the Plan, along with any related investment earnings and losses on such contributions, are held in the trust fund under the Plan, established pursuant to a trust agreement, in an account for you. The Firm has appointed Voya as the record keeper who is responsible for maintaining detailed records of the money in the Plan, including how much is contributed, how it is invested, what the earnings and/or losses have been and what amounts have been distributed. Your overall Plan Account is divided into the following sub-accounts for recordkeeping and investment purposes, as follows: Active

10 401(k) Contribution Account: Reflects your 401(k) Contributions, if any, plus related investment earnings and losses. Roth 401(k) Contribution Account: Reflects your Roth 401(k) Contributions, if any, plus related investment earnings and losses. Staff Contribution Account: Reflects the Staff Savings Contributions made on your behalf, if any, plus related investment earnings and losses. Special Counsel Contribution Account: Reflects the Special Counsel Savings Contributions made on your behalf, if any, plus related investment earnings and losses. Senior Professional Staff Contribution Account: Reflects the Senior Professional Staff Savings Contributions made on your behalf, if any, plus related investment earnings and losses. Partner Contribution Account: Reflects your Partner Savings Contributions, if any, plus related investment earnings and losses. Catch-Up Contribution Account: Reflects your Catch-Up Contributions, if any, plus related investment earnings and losses. Rollover Account: Reflects your Rollover Contributions, if any, plus related investment earnings and losses. After-Tax Contribution Account: Reflects after-tax contributions you made under the Brumbaugh, Graves, Donohue & Raymond 401(k) Plan on and after January 1, 1987, if any, plus related investments earnings and losses. After-Tax Contributions are no longer permitted under the Plan. Voluntary Contribution Account: Reflects after-tax contributions you made under the Baker Botts L.L.P. Cash or Deferred Plan prior to January 1, 1987, if any, plus related investment earnings and losses. Voluntary Contributions are no longer permitted under the Plan. Prior Brumbaugh Plan Account: Reflects the employer money purchase pension contributions made on your behalf under the Brumbaugh, Graves, Donohue & Raymond Money Purchase Pension Plan, if any, plus related investment earnings and losses. Prior Brumbaugh Matching Account: Reflects the employer matching contributions made on your behalf under the Brumbaugh, Graves, Donohue & Raymond 401(k) Plan, if any, plus related investment earnings and losses. Prior Profit Sharing Account: Reflects the employer profit sharing contributions made on your behalf under the Brumbaugh, Graves, Donohue & Raymond Profit Active

11 Investment of Plan Account Sharing Plan, if any, and the Miller, Cassidy, Larroca & Lewin Profit Sharing Plan, if any, plus related investment earnings and losses. You choose how the amounts in your Account are invested by selecting from the investment funds offered under the Plan from time to time. The Plan offers several investment options among core funds, target funds and a brokerage investment alternative. Detailed information about each of the investment funds along with current investment performance results is available online at You may invest your Account among the various investment funds in any whole percentage up to 100%. If you fail to make a valid election, the amounts in your Account will be invested in the age appropriate Vanguard Target Retirement Fund or such other fund selected by the Investment Committee in a uniform and nondiscriminatory manner (which fund may, but is not required to, satisfy the requirements under the Department of Labor regulations of a qualified default investment alternative ). Updated investment performance results will be sent to you at the end of each calendar quarter and may also be available electronically. Changing the Way Your Account is Invested You may make investment election changes for your existing Account and for future contributions at any time by calling the Voya at k ( ) or accessing your Account online at Your new investment election will be processed the same business day if the transaction is completed before 4:00 p.m. ET. Transactions completed after 4:00 p.m. ET on any business day or on a weekend or holiday will be processed the next business day. Investment Advice from Voya Retirement Advisors Voya Retirement Advisors, LLC provides professional investment advice and managed account service under the Plan. This service provides asset allocation recommendations to Participants on the assets in their Plan Account. It is your choice whether to use Voya Retirement Advisors, LLC with respect to your Plan asset allocation. Voya Retirement Advisors, LLC offers (i) the do it yourself Online Advice services at no cost and (ii) the Professional Management services with a tiered fee structure. Both services are available online at or by calling Voya at k ( ). The Online Advice services provide quarterly Progress Reports and an Advice Light, which alerts Participants whenever the service has new advice for them. You will receive a Retirement Evaluation, which is a personalized statement showing what your investments and savings might look like in the future and offer steps on how you can improve your financial outlook. The Professional Management service is a managed account that is designed for Participants to delegate investment decisions to the Voya Retirement Advisors, LLC service. The program develops a personalized portfolio that is Active

12 continually monitored and periodically adjusted. You will receive quarterly reports and have phone access to a professional investment advisor. Online access to your Account is also available at all times. below: The tiered fee structure for the Professional Management service is provided Account Balance Annual Fee (in basis points) Monthly Fee First $50, $5.00 Next $50, $4.17 Next $50, $3.33 Amounts Over $150, $1.67 Self-Directed Brokerage Services from TD Ameritrade, Inc. TD Ameritrade, Inc. provides low cost brokerage and related services through its self-directed brokerage accounts ( TD Ameritrade SDBA ) for which it receives direct compensation. It gives you access to a broad range of investments including individual stocks, bonds, CDs and more than 13,000 mutual funds. For additional information or if you would like to open a TD Ameritrade SDBA, you can access a SDBA Application Package online at or you may call TD Ameritrade at Investment Choices Under the Plan The investment funds and investment alternatives provided in the Plan are selected by the Investment Committee. Any current investment fund may be discontinued and new investment funds may be established at any time and from time to time by the Investment Committee. The funds, as well as the brokerage investment alternative discussed below, available under the Plan as of the date of this SPD are available online at These funds may be changed from time to time, and if they are changed you will be notified. The core investment funds are intended to provide you with a broad range of investment choices that will allow you to determine the appropriate risk and return levels for you based upon your particular situation. Some of the funds may involve greater risk to your Account in exchange for the chance to earn a greater return on your money. Other funds may offer a steady and more predictable investment return and less risk to principal. Active

13 It is important for you to understand that past performance of any fund is not a guarantee that the investment fund will continue to perform at the same level or offer the same yield in the future. You should understand that all investment funds involve some risk of loss or decline in the principal amount invested. How you choose to invest your Account is an important decision which you should consider carefully. You should obtain and read a copy of each fund s prospectus before deciding to invest in any of the funds available under the Plan. ERISA Section 404(c) Plan Because you choose how to invest the contributions in your Account, no one else is responsible for any losses resulting from your investment decisions. This Plan is intended to constitute a plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974 ( ERISA ) and Title 29 of the Code of Federal Regulations Section c-1. As a result, fiduciaries of the Plan, including the Investment Committee and the Administrative Committee, are relieved of liability for any losses which are the result of your investment instructions. The fact that a fund or other investment option is available under the Plan is not a recommendation that you invest in that fund or option. Account Information You can obtain current information about your Account balance by calling Voya at k ( ) or accessing your Account online at Account Valuation Your Account is valued on a daily basis. Investment earnings and losses will be posted to your Account and valuations for distributions will generally be made as of the close of trading each day the stock exchange is open. Account Statement You will receive a statement of your Account each calendar quarter. The statement will show the closing balances from the previous quarter, contributions made to your Account, how the performance of each investment option has affected your Account (profit or loss), any Plan related fees and expenses, individual transaction fees and a closing balance. These statements will be generated approximately 15 business days after the end of each calendar quarter. Expenses of Plan and Trust As with the majority of retirement plans, most Plan expenses are paid by the employees who participate in the Plan. Fees and expenses are a part of investing. Two in particular will have an impact on your Account: Active

14 Investment Fund Expenses. All investment funds incur expenses from basic operations - including investment advisory fees, services, postage, printing, telephone service, and other costs of running the fund. The total of these costs is known as the expense ratio, which is expressed as a percentage of the fund's average net assets during the year. These expenses are paid from income earned by each investment fund. You will not see these expenses on your statement because they are deducted from the fund before fund returns are reported. For information on the expense ratios for the investment funds in the Plan, refer to the fund s prospectus. Administrative Fees. Administrative fees are paid from income earned by the investment funds and from brokerage expenses incurred by Participants. These fees cover recordkeeping, Account maintenance, investment management and certain other administrative expenses. Fee Disclosure. Fees charged directly to your Account are shown on your Account statement. You will receive an Annual Fee Disclosure Statement and a Disclosure Statement at least once per quarter that describes all Plan related fees and expenses and certain individual transactional fees, such as loan initiation fees, that may be charged to your Account. VESTING IN YOUR PLAN ACCOUNT You are always 100% vested in your Account and your Account cannot be forfeited for any reason. WITHDRAWALS Although the primary purpose of the Plan is to help you provide for your financial security when you are no longer working, it is recognized that under certain circumstances you are eligible to withdraw money from your Account while you are actively employed or on military leave. Age 59½ and Rollover Account Withdrawals If you have attained age 59½, you may elect to withdraw your entire Account (excluding amounts from your Prior Brumbaugh Plan Account, if any) while you are actively employed. If you have a Rollover Account, you may elect to withdraw all or a portion of your Rollover Account at any time, regardless of your age. You may also continue to make contributions to the Plan after you have requested either of these withdrawals if you are still an active Participant. In order to request an age 59½ or Rollover Account withdrawal, you should contact Voya at k ( ) or online at You will receive your withdrawal in a single lump-sum distribution. Active

15 Uniformed Services Withdrawal If you are on military leave as a result of being on active duty for longer than 30 days, you may elect to withdraw all or a portion of your vested Account as if you have terminated employment. Such amount may be subject to the 10% early distribution penalty tax. Your ability to contribute to the Plan will be suspended during the six-month period beginning on the date of the withdrawal from your Account. LOANS If you are an Employee or a Partner in the service of the Firm, you may obtain a loan from certain sub-accounts in your Account under the Plan, subject to rules and procedures adopted by the Plan Administrator. For additional information, please refer to the rules, requirements and procedures set forth in the Loan Procedures adopted by the Plan, a copy of which is available on SquareOne or by calling Voya at k ( ). If you are interested in taking a loan from the Plan, you may access a loan application online at or by calling Voya at k ( ). DISTRIBUTION OF YOUR ACCOUNT Payment of Distribution You will be eligible to receive distribution of your Account when you terminate service with the Firm for any reason, including your retirement, your death or your disability. You may elect to receive your Account as soon as administratively feasible after your termination of service with the Firm. To request a distribution, you should contact Voya at k ( ) or online at If a distribution from your Roth Contribution Account is not a qualified distribution (as defined in the Roth 401(k) Contribution section), the earnings on your Roth Contribution Account will be subject to federal and, if applicable, state income taxes and may be subject to a 10% penalty tax. You may request a statement from Voya that indicates (i) that the distribution from your Roth Contribution Account is a qualified distribution, or (ii) the portion of the such distribution from your Roth Contribution Account that is the investment in the contract. Such Roth statement must be provided to you within 30 days. If the amount in your Account is $1,000 or less, you will automatically receive your distribution in one lump-sum payment as soon as administratively feasible after you terminate service with the Firm, unless you elect to roll over your Account balance to an IRA or another employer s qualified plan. If the amount in your Account is greater than $1,000 but equal to or less than $5,000, such amount will be automatically rolled over to an IRA in your name with Voya Financial, Inc. (or such other regulated financial institution selected by the Administrative Active

16 Committee in accordance with safe harbor regulations issued by the Department of Labor) as soon as administratively feasible after you terminate service with the Firm, unless you elect to roll over your Account balance to another IRA or another employer s qualified plan. If the amount in your Account is greater than $5,000, you must consent in writing to receive the distribution prior to age 65. You may elect to delay the distribution of your Account in accordance with the Required Minimum Distribution rules described below. Required Minimum Distribution If you attain age 70½, you must receive distribution of your entire Account no later than (1) the April 1 st following the calendar year in which you attain age 70½ or (2) the April 1 st following the calendar year in which you terminate service with the Firm. However, if you are a 5% owner of the Firm, you must receive distribution of your Account no later than the April 1 st following the calendar year in which you attain age 70½. Form of Distribution Except as provided below with respect to a Participant s Prior Brumbaugh Plan Account, distributions made from the Plan will be made in the form(s) provided below. The amount to which you are entitled is the value of your Account as of the valuation date on which your distribution is determined. Required minimum distributions, as described above, are made in the form of a single, lump-sum payment. No lump-sum payment of a Participant s Prior Brumbaugh Plan Account will be made until the completed spousal consent form, if applicable, is received by the Plan Administrator. You will receive your entire Account balance in a single lump-sum distribution. If you have a Prior Brumbaugh Plan Account, the amount in that sub-account will be paid to you in the form of a qualified Joint and Survivor Annuity if you are married (or if you die before distribution commences and your spouse survives you until the time such distribution commences). A qualified Joint and Survivor Annuity is an immediate annuity for your life with a survivor annuity for the life of your spouse equal to at least 50% of the annuity paid to you. The Joint and Survivor Annuity will be funded by the purchase of an insurance annuity contract. You may elect, with your spouse s written, notarized consent, to receive your Prior Brumbaugh Plan Account in the form of a lump-sum distribution or a 75% survivor annuity. When you request a distribution from the Plan, you will receive additional information regarding the benefit options available to you. Taxation of Distribution Rolling Over Your 401(k) Contribution Account (Excluding Roth Contribution Accounts) If you choose to directly rollover any portion of your 401(k) Contribution Account to an IRA or another employer s qualified retirement plan: Active

17 Your payment will not be taxed in the year of the rollover, and no income tax will be withheld. Your payment will be sent to you by U. S. mail and payable to your IRA or another employer s qualified plan that accepts your rollover. Your payment will be taxed later when you take it out of the IRA or other employer s qualified plan. If you choose to have your Plan Account paid directly to you in a lump sum: You will receive only 80% of the amount of your payment because 20% federal income tax must be withheld. Your payment will be taxed in the current year unless you roll it over to an IRA or another employer s qualified retirement plan within 60 days of your receipt of the distribution. You may also incur an additional nondeductible 10% penalty tax on any distribution (including withdrawals) you receive prior to attaining age 59½. As a general matter, this penalty will not apply if you roll over the distribution or if you received the distribution on account of retirement after age 55, death, or disability. If you elect to receive your Plan distribution in the form of a qualified Joint and Survivor Annuity (which distribution form may only be elected with respect to amounts in your Prior Brumbaugh Plan Account), each payment will be subject to federal income taxation and withholding when received. Amounts not yet paid out to you will continue to be tax deferred. Tax withholding applies under the same rules that apply to tax withholding on wages. The 10% early distribution penalty tax does not apply to lifetime annuity payments regardless of what age they begin. Rolling Over Your Roth 401(k) Contribution Account These complex rules vary depending on if your Roth 401(k) Contribution Account is rolled into another Roth 401(k) Plan or a Roth IRA. If you choose to directly rollover any portion of your Roth 401(k) Contribution Account to an IRA or another employer s qualified retirement plan: The 5-year-taxable period is determined independently under the Roth 401(k) Plan and a recipient Roth IRA. Non-taxable portions from a Roth 401(k) account may only be rolled over to another Roth 401(k) account by a direct rollover. If you choose to have your Roth 401(k) Contribution Account paid directly to you in a lump sum: Active

18 Only the taxable portion of such amount (meaning only the earnings on the Roth 401(k) Contributions from a non-qualified distribution) may be rolled over to another employer s qualified plan that accepts such rollovers and the rollover must be made within 60 days of your receipt of distribution. You may roll over all or a portion of such amounts to a Roth IRA within 60 days of your reciept of distribution. The portion of your distribution attributable to earnings on your Roth 401(k) Contribution Account will be subject to federal (and, in some cases, state) income taxes if the distribution is not a qualified distribution (as defined in the Roth 401(k) Contribution section). You may also incur an additional nondeductible 10% penalty tax on any earnings included in your distribution (including withdrawals) if the distribution is not a qualified distribution. In-Kind Rollovers from TD Ameritrade Self-Directed Brokerage Account You may elect, in the form and manner provided by the Plan Administrator, to make an in-kind rollover from your TD Ameritrade SDBA to an IRA or another employer s qualified plan that will accept such in-kind rollover but only by an ACAT transfer. Seeking Tax Advice for Plan Distributions Whenever you receive a distribution you should consult a qualified tax advisor. The laws concerning plan distributions are very complex and are subject to change. Furthermore, each individual s situation is different. Professional advice will help you make an informed decision about your Plan Account. Distribution Upon Death If you die before the distribution of your Account begins, the balance in your Account (except for the amount in your Prior Brumbaugh Plan Account, if any) will be paid to you as provided below. If you have a Prior Brumbaugh Plan Account and you die prior to the commencement of distribution of that sub-account, your surviving spouse will receive an immediate annuity for his or her life of the amount in such sub-account unless he or she elects, in the form and manner prescribed by the Plan Administrator, to receive that amount in the form of a lump-sum payment. In the event of your death, your Account will be distributed in the form(s) provided below to your spouse, or if there is no spouse or the spouse has consented to another beneficiary, then to the beneficiary designated by you; or, in the absence of an effective designation or if no designated beneficiary survives you, then to your estate. The entire amount in your Account must be distributed as soon as practicable and within one year following your date of death. Active

19 If payment has begun on your Account before you die, but your Account has not been fully paid to you (as in the case of a qualified Joint and Survivor Annuity under the Prior Brumbaugh Plan Account, the remaining portion of your Account will be paid to your beneficiary as rapidly as it would have been paid to you. If a distribution from your Roth 401(k) Contribution Account is not a qualified distribution (as defined in the Roth 401(k) Contribution section), the earnings in your Roth 401(k) Contribution Account will be subject to federal and, if applicable, state income taxes. Non-Spouse Beneficiary Rollovers A non-spouse beneficiary may elect to transfer, in a direct trustee-to-trustee transfer, the amount to which he or she is entitled under the Plan to either a Code Section 408(a) IRA or to a Code Section 408(b) IRA as more fully described below. By transferring such amount to an IRA, the non-spouse beneficiary may defer paying taxes on the amount to which he or she is entitled. Generally, the IRA will provide that the non-spouse beneficiary may elect to receive (i) installment payments over the life expectancy of the non-spouse, beginning within one year of the Participant s death, or (ii) a full distribution by the end of the fifth year following the year in which the Participant died. However, the IRA must make distributions according to the same required minimum distribution rules that apply to distributions to a non-spouse beneficiary under a qualified plan. The IRA, known as an inherited IRA, must be established for the purpose of receiving such distribution to a non-spouse beneficiary (which includes trusts), and must be titled such that it identifies itself as an IRA with respect to both the deceased employee and the nonspouse beneficiary. The trustee-to-trustee transfer described above is treated as an eligible rollover distribution; however, amounts cannot be rolled over from the inherited IRA to another type of IRA. If a non-spouse beneficiary desires to transfer the benefit to which he or she is entitled to an IRA as described above, he or she must make such election in the form and manner prescribed by the Administrative Committee after receiving notice of his or her distribution options; otherwise the non-spouse beneficiary s benefit will be paid in the form of a lump sum distribution. Distribution Upon Disability If you are an Employee (not a Partner) and are placed on a leave of absence due to a Disability (as defined in the Plan) with the expectation that you will not return to service with the Firm, you will be entitled to receive a distribution of the entire amount in your Account as of the date on which you are placed on such leave of absence or, if later, the date the Administrative Committee determines that you have met the Disability requirements under the Plan. If a distribution from your Roth 401(k) Contribution Account is not a qualified distribution (as defined in the Roth 401(k) Contribution section), the earnings in your Roth 401(k) Contribution Account will be subject to federal and, if applicable, state income taxes. Active

20 Designation of Beneficiary At the time you are employed by the Firm, you will be asked to name a beneficiary (that is, someone who will receive your benefits from the Plan if you die). You may name anyone as your beneficiary. If you are married and you designate someone other than your spouse as your beneficiary, you must obtain your spouse s written, notarized consent. If you do not name a beneficiary, your Account will be distributed to your spouse, or if he or she dies before you, your estate. If you do not have a valid beneficiary form on file with the Plan Administrator at the time of your death, then your Account will be paid to your estate. Your current beneficiary form on file will apply to both Plan A and Plan B, as applicable. You may change your beneficiary at any time. To do so, complete a change of beneficiary form, obtain your spouse s written, notarized consent to the new designation (if your new beneficiary will be someone other than your spouse), and return the form to the Benefits Office in Houston. CONCERNING THE PLAN AND PLAN BENEFITS Amendment and Termination of Plan Although the Firm intends to continue the Plan, the Firm reserves the right to amend the Plan at any time and from time to time in any way or to terminate the Plan at any time. Assignment of Benefits Your benefits may not be assigned or alienated, except as may be permitted by federal law. Participants and other persons entitled to benefits under the Plan are not allowed to assign them or otherwise use them as collateral prior to the date that they are actually paid. Furthermore, your creditors may not attach them. However, the Plan will make all payments required by a Qualified Domestic Relations Order, which is a state court order requiring payments to be made to a former spouse or a child (see Qualified Domestic Relations Order ). Qualified Domestic Relations Order Certain domestic relations orders may create or recognize the right of your spouse, child or other dependent to receive all or a portion of your Account under the Plan. The Plan may not follow any domestic relations order relating to your Account unless the order is in the form of a qualified domestic relations order ( QDRO ). A copy of the procedures governing QDRO determinations under the Plan may be obtained from the Benefits Office in Houston. Participants and beneficiaries may also obtain, without charge, from the Plan Administrator a copy of the QDRO procedures. Upon notice of a possible domestic relations order, your Account will be frozen and you will not be permitted to take any distributions, including a Plan loan, from your Account. You will be notified if the Plan receives a domestic relations order relating to your Account under the Plan and the Plan Administrator will determine, within a reasonable time, if the domestic relations order is a QDRO. You will also be notified of the Plan Administrator s Active